How healthy is the German economy? Are it's manufacturers worried about China? (Q-65)

Introduction:

This topic throws light on how german economy is growing fast and delivering healthy competetion to china. Now germans are focusing on the world market by delivering the quality product to the world by innovation. On the other hand china’s economic growth in the last few years has been quite significant to the point of being one of the largest and fastest growing in the world.

Discussion:

Germany Economy

Germany has the largest population in the European Union with 81.8 inhabitants in January, 2010. The prosperous German economy attracts millions of immigrants from around the world as it is the third largest country in terms of immigration. Germany is bordered by Poland, Czech Republic, Austria, Switzerland, France and Netherland. The land area is around 357,021 square kilometers and has maintained a high standard of living. Germany is known for its well established social security system which stems from the flourishing German economy.

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Germany Economy: Profile

Germany is the largest economy in the European Union. It benefits from a large pool of talented work force that has enabled Germany to dominate the vehicles, machinery, chemicals and household equipment vertical across the globe.

It is this strong and productive work force that enabled Germany to face recession with a resilient face and the Germany economy could manage to have a GDP (purchasing power parity) of $2.182 trillion in 2009. The graph below shows how the German economy performed since 2007 till 2009.

Even in the recession marred years, the German economy managed to stay stable as the world sixth largest country in terms of GDP (2009.)

However as is the case with recession, the economy did constrict and stood at -5% in 2009. The graph below shows how the real growth rate has performed since 2007 till 2009. (in percentage)

The GDP per capita has been strong as well. In 2009, the per capita GDP was $34,200. In 2008, the per capita GDP was slightly higher at $35,900 and $35,500 in 2008. However, the unemployment rate grew from 7.8% to 8.2% in 2009. This may be attributed to factors ranging from an industrial slow down to lesser imports for productivity.

Majority of Germans fear China

78 percent of respondents willing to worries that China increasingly buy up companies in Europe and Germany, for example, reported the “Bild”-Zeitung, citing a survey by market research firm YouGov. Only 11 percent therefore welcomed this development. 58 percent of respondents rated it as negative, that China will soon be the strongest economy in the world. The negative attitude was mainly among younger participants, the survey noted, it said.

Siemens AGM at the beginning: First of all, the booming demand from emerging economies like India and China puts German businesses tailwind

“The German economy has benefited more than any other economy in Europe from the boom in China,” chief Wansleben GCIC maintains it. The companies would export more to the People’s Republic as their competitors from France, Britain and Italy combined. “Germany is damaging China’s largest trading partner in Europe,” said Wansleben.

In China itself, one sees clearly not different. Prior to the two-day visit to Germany by Prime Minister Wen Jiabao, the official newsletter of the Communist Party in Beijing was first referred to a kind of white paper with a single European country. A report from the “World” According to the party to raise Germany to the authors’ preferred European allies. ” The interim results of the ruler of China praises Sino-German exchange expressly to be greater than any other country. Examples include not only the youth exchange, but also the cooperation in banking supervision, especially on climate change and cooperation in science and technology

Conclusion:

Growing competition from China is spurring German machinery makers to reassess how to preserve an edge that has made their industry a linchpin of the country's export-driven economy.

Chinese rivals are gaining ground in their home market, unnerving German producers about the competitiveness of a sector that accounts for 7% of the German economy. The German companies find themselves up against a state-driven industry growing in large measure through acquisitions and inexpensive labor and building on lessons learned two decades ago in the textile industry.

Submitted by- Nirmal Singh

Class- MBA Ist C

Submitted to- Prof. Gurdeepak Singh